Leo Burnett Co.

Published on September 15, 2003.

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Founded in Chicago, 1935; broke into the top 10 U.S. agencies with billings of $46 million, 1953; merged with D'Arcy Masius Benton & Bowles, 1999, to form Bcom3 Group; acquired by Publicis Groupe, 2002.

Leo Noble Burnett opened Leo Burnett Co. in Chicago on Aug. 5, 1935, with three accounts—Minnesota Valley Canning Co., Hoover Co. and Realsilk Hosiery—and $900,000 in billings that he brought with him from Erwin, Wasey & Jefferson.

The early years of the agency were unspectacular, with billings surpassing $1 million in 1938. Two early accounts have been credited with boosting the agency's standing: Pure Oil Co., which Burnett acquired in 1938 and which made the agency a player in network radio, and the American Meat Institute, acquired in July 1940.

Development of a Burnett culture

In the 1940s, Burnett began to blossom, opening a branch office in New York in 1944. The agency philosophy centered on the work ethic of its founder, who was driven by what he saw as the pure beauty of ads, not the desire for personal wealth. Dedicate yourself to making the ads, Mr. Burnett said—"our kind of ads"—and the money would come. He constantly pressed to get new business. Atchison, Topeka & Santa Fe Railway System came in 1942, followed by Pillsbury Co. three years later and Kellogg Co. in 1949.

After World War II, much of Burnett's growth came from within. The Green Giant brand, for example, had grown so much by 1950 that it replaced Minnesota Valley Canning as the company's name. Burnett's billings went from $7 million to $22 million between 1945 and 1950, making it the No. 20 agency in the U.S. By 1950, 25% of its billings were in broadcast media, including "Howdy Doody" (Kellogg and Mars), "Arthur Godfrey Time" (Pillsbury) and "Art Linkletter's Houseparty" (Green Giant). By 1952, that figure rose to 40%.

The demands of TV brought new pressures as more package-goods accounts flocked to the agency for TV campaigns. Burnett had to adapt its print-based approaches to the camera, and soon a growing menagerie of simple animals and cartoon critters populated Burnett's TV work, starting with Tony the Tiger for Kellogg's Frosted Flakes in 1951. In 1952, Burnett set up its first broadcast department, with recording and film editing capacities and a screening room for 70 people.

In November 1954, the agency took over Philip Morris' Marlboro brand and, using the image of a cowboy on horseback, transformed it from a women's cigarette into a product for men. In 1999, Advertising Age named the campaign, which was still running 45 years later, the third most important of the century and the cowboy image the top icon. (A decade after the Marlboro change, Burnett launched Virginia Slims as a cigarette for women with the theme, "You've come a long way, baby, to get where you got to today.")

In October 1955, the agency won the Pabst account, marking its re-entry into the beer business after a four-month encounter with Joseph Schlitz Brewing Co. in 1952. The Schlitz experience was not wasted, however. Burnett shelved its campaign based on the slogan "What'll you have?" and sold it to Pabst three years later. Schlitz, the country's leading beer in the mid-1950s, returned to Burnett in 1961, a poor second to Anheuser-Busch. But all the "Gusto" in the world could not save it from an aggressive move by Miller Brewing that pushed Schlitz to No. 3 by the 1970s, and the brand left Burnett again in 1978.

By the late 1950s, the agency's old guard began to yield, and a second generation began to emerge. At the same time, the critter population was growing faster than the agency's billings. Charlie the Tuna was created for Star-Kist Foods in 1958, followed by Hubert the Harris Lion for Harris Bank, the Little Green Sprout for Green Giant, Morris the Cat for Star-Kist's 9 Lives cat food, the Keebler Elves, a TV version of the Green Giant and, in the mid-1960s, an endomorphic lump of dough named Poppin' Fresh for Pillsbury.

In 1999, when Advertising Age looked back on a century of advertising, the magazine chose the most identifiable brand icons of all time. Of the 10 selected, four were created or mentored by the Burnett agency: the Marlboro Man, the Green Giant, the Pillsbury Doughboy and Tony the Tiger. No other agency or company was associated with more than one.

In 1967, billings passed $260 million, including the nearly $38 million that came with the acquisition on March 20, 1967 of Detroit-based D.P. Brother & Co. with its Oldsmobile business. In the late 1980s and into the 1990s, Burnett would proclaim to a younger generation that the brand "is not your father's Oldsmobile." The brand continued at Burnett until it was announced by GM that the division would be discontinued shortly after the turn of the century.

In February 1967, Mr. Burnett transferred all of his voting stock to a charitable foundation, and on July 1, at age 75, he stepped down as CEO. Philip Schaff became chairman, and Mr. Burnett assumed the title of founder-chairman. It was a period of transition, not all of it smooth. On June 7, 1971, Mr. Burnett died at age 79.

Overseas business

While some believed the agency suffered from creative drift after Mr. Burnett's death, the agency crossed the $1 billion mark in 1980. One reason was the agency's decision to go global in the 1960s, despite Mr. Burnett's lack of enthusiasm for the move. In April 1962, Burnett bought London-based Legett, Nicholson & Partners and renamed it Burnett-Nicholson. In May 1969, it also acquired the London Press Exchange, an old London agency with overseas offices, and merged it with Burnett-Nicholson.

Using the London shop as a base, Burnett acquired agencies in Puerto Rico, Colombia, Brazil and Argentina. Its purchase of Jackson-Wain in Sidney made it a presence in Hong Kong, Bangkok, Singapore and Tokyo. Other buys put the agency in what was then Rhodesia and in South Africa and Malawi. In the 1970s and 1980s, overseas divisions of Burnett's domestic clients began adding business.

In 1981, with 36 overseas branches in operation, Chairman Jack Kopp split the international and domestic divisions into autonomous entities, each with its own chief executive. At the time, international was contributing only a fraction of worldwide billings. By 1995, with 64 offices, it led domestic billings by $200 million.

An international presence also played a role in landing the $75 million McDonald's Corp. business in October 1981, one of the largest account shifts in advertising history up to that time. Mr. Kopp's plan was strategic encirclement: Win McDonald's business in outposts such as Belgium, Holland and France; show the client what the agency could do; then strike directly at the marketer's headquarters. The strategy worked.

In the late 1990s, there were increasing rumors of an initial public offering at Burnett. It therefore came as a major surprise on Nov. 3, 1999, when the parent companies of Burnett and D'Arcy Masius Benton & Bowles, both closely held, announced the creation of BDM with a combined value of more than $2 billion. Within a month of its formation, the company was renamed Bcom3 Group. In addition to the assets of DMB&B and Burnett, Bcom3 also included N.W. Ayer & Partners, Bartle Bogle Hegarty and Starcom Media, among others.

Roy Bostock, chairman of the DMB&B parent MacManus Group, became chairman, and Roger Haupt, CEO of Burnett's parent, the Leo Group, became CEO of Bcom3, which immediately became the world's fourth-largest ad company with combined revenue of $1.7 billion on billings of more than $13 billion. A 20% stake in Bcom3 was held by Dentsu, which had been in negotiations with Burnett for several months.

In September 2002, Bcom3 was acquired by Publicis Groupe for $3 billion. Following the merger, Publicis shuttered N.W. Ayer and D'Arcy and consolidated Publicis offices.

In 2003, Burnett was the No. 2 U.S. agency brand, according to Advertising Age, trailing only J. Walter Thompson. It had U.S. revenue of $379 million, a 6.6% increase over 2002.

In early 2004, Leo Burnett Worldwide CEO Linda Wolf announced her retirement to make way for Tom Bernardin, who was brought in from Lowe, New York.